when some places say you get 5.5% apy, in a 3 month account, do you get the full year apy? or only 3 months?

Question

for a cd. i know 12 months you get 5.5% but do you get your amount of money plus 5.5% if its only 3 months?

Answer 1

That 5.5% is for the year. So if it's a 3 months account - that would be 1/4 of that.

Answer 2

Off the top of one's head, the answer is you should get a one fourth of the 5.5%.

But I have seen some banks with "cute" offerings. So, look for the "fine print". For example, some of the curves I've seen are:

* a year defined as 360, 365, and 366 days (the bank will calculate 1/grazionith of a penny if they get an edge).

* actually count days in the month to get an edge (i.e., you say 3 months and they say it's 92 days).

* automatically renewing at the end of your 3 months and find that you're locked in for another 3 at the the three month rate.

* making redemption rules that are "interesting" at best, like: you have to redeem at their hq, not the branch you opened it at. you have to present the papers exactly five days before the cd rolls and again at the roll date. you can't tell them when you open that you don't want to renew.

* and that doesn't include cheating you by "losing" your instructions, paperwork, or "stuff". Hitting you with withholding cause your w9 was "wrong".

Where money is concerned there are no easy ones!

Answer 3

First of all, Reinkefj, your answer is way too long. Simply not necessary, you should re-edit & cut out 90% of it.

As per the answer to this question, a 3-month return of 5.5% would be insane, if it's promised to you. Compounded, that's an annual return of about 24%. You will never, ever get that risk free, as in an account that promises to pay you that much interest.

Answer 4

You would receive 1.35% each quarter, and when compunded quarterly, would give you a 5.5% APR.

Answer 5

No.